LOGISTICS SYSTEM REFORM PROGRAM INDONESIA

ASEAN-‐AUSTRALIA NEW ZEALAND FREE TRADE AREA (AANZFTA) ECONOMIC COOPERATION WORK PROGRAMME (ECWP)

Mr Erwin Raza Deputy Assistant for Logistics System & Trade Facilitation, Indonesia

LOGISTICS SYSTEM REFORM PROGRAM INDONESIA “Locally Integrated, Globally Connected for National Competitiveness and Social Welfare ” Cebu, Philippines, April 28-29 2014

OUTLINE

BACKGROUND

MASTERPLAN FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT (MP3EI)

INDONESIA NATIONAL LOGISTICS SYSTEM REFORM PROGRAM

CHALLENGES OF IMPLEMENTATION

1

2

3

5

4

BACKGROUND .... (1) DEMOGRAPHY 2013

Population 250 million (4th largerst in the world)

Age Structure

0-14 years 26,6%

15-24 years 17,1 %

25-54 years 42,2%

55-64 years 7,6%

65 years and over 6,4%

GEOGRAPHY 2013 Number of Island 17.000

Total Area 1.904.569 sq km

Land 1.811.569 sq km Water 93.000 sq km Coastal line 54.716 km (2nd longest in the

world)

ECONOMY 2012 GDP 2012 USD 878,04 billion GDP per capita 2012

USD 3,592 billion

Natural Resources : petroleum, natural gas, tin, nickel, timber, bauxite, copper, coal, gold, silver, bauxite, palm oil, rubber, timber, Cocoa, and fishery

VISION 2025: to create a self-sufficient, advanced, just, and prosperous Indonesia.

GDP: USD 700 Billion Income/Capita

USD 3,000

GDP: ~ USD 15.0 – 17.5 Trillion Income/Capita

~ USD 44,500 – 49,000 GDP: ~ USD 4.0 – 4.5 trillion Income/Capita estimated ~ USD 14,250

–15,500 (country with high income)

“Transform the Indonesian economy into a developed nation, which recognized by the world community, through high, inclusive,

and sustainable economic Growth by 2025 ”

Slide 4

Plans for Indonesia’s GDP

v Acceleration and Expansion of Indonesia Economic Development

BACKGROUND .... (2)

REFORM PROGRAM

Presidential Direction No.32 /2011 on Master Plan of Acceleration and Expansion of Indonesian Economic (MP3EI) 2011-2025

Presidential Direction No. 26 /2012 on Blueprint of National Logistics System Development

I

THE FRAMEWORK DESIGN OF THE MASTERPLAN FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT

STRATEGY 1: ECONOMIC POTENTIAL DEVELOPMENT THROUGH SIX ECONOMIC CORRIDOR

Center for Production and Processing of Natural

Resources and As Nation’s Energy Reserves

Center for Production and Processing of National

Mining and Energy Reserves

Center for Production and Processing of National

Agricultural, Plantation, Fishery, Oil &

Gas, and Mining” Center for Development of Food, Fisheries, Energy,

and National Mining”

Driver for National Industry and Service Provision”

Gateway for Tourism and National Food Support”

“THE THEME OF EVERY ECONOMIC CORRIDOR”

Main Economic Program and Activities in Each Corridor

Rubber Sumatera

Jawa

Kalimantan

Sulawesi

Bali – Nusa Tenggara

Papua – Kep. Maluku

Palm Oil

Textile

Coal Shipping Steel

Food & Beverages

Equipment & Machinery Telematics Defence

Equipment Shipping Metrop Jakarta

Area

Sunda Straitt

Strategic Area

Palm Oil Timber Oil & Gas Steel Bauxite Coal

Food Agriculture Cocoa Fishery Nickel Oil & Gas

Tourism Animal Husbandry Fishery

Food Agriculture Fishery Copper Nickel Oil & Gas

Eight main programs : (1) agriculture, (2) mining, (3) energy, (4) industry, (5) maritime, (6) tourism, (7) telecommunication, and (8) development of strategic zones.

22 main economic activities, include as follwos:

STRATEGY 2: STRENGHTHENING THE NATIONAL CONNECTIVITY

Coast line: 54,716 kilometers. Sea lines: Ø  Straits of Malacca (SLoC), Ø  Sunda Strait (ALKI 1), Ø  Straits of Lombok and Makassar Straits (ALKI

2), Ø  Strait of Ombai Wetar (ALKI 3). §  SLoC: Sea Lane of Communication; §  ALKI : Indonesian Archipelagic Sea Lane

2

Local and National Network Integration Global Network Connection

Europe City

Asia

America

Indonesia International Hub Port

Rural

City

City

Africa

Australia & Oceania

Rural

Rural

Rural

Rural

Rural

Rural

Rural

Rural

Inter Island

Inter Island

Inter Island

Logistics Vission 2025: “Locally Integrated, Globally Connected for NaFonal CompeFFveness and Social Welfare”

SIX KEY DRIVERS OF NATIONAL LOGISTICS SYSTEM

Phase I (2011-‐2015)

Goal: lay a strong foundaDon to establish an effecDve and efficient NaDonal LogisDcs System in order to achieve the locally integrated vision and create a strong basis for being connected to ASEAN logisDcs networks

AcFon: Regulatory Revision, HR Development and LogisFcs Infrastructure Improvement in order to create Local and NaFonal LogisFcs IntegraFon

Phase II (2016-‐2020) Phase III (2021-‐2025)

Goal: strengthen domestic logistics integration, and synchronization, coordination and integration with ASEAN logistics networks, and lay a strong foundation to be integrated with the global logistic network to achieve the Globally Connected vision

Action: Development and expansion of logistics infrastructure, capacity building for actors and providers of logistics services to make the national logistics system connected to the ASEAN logistics network

Goal: operate effecDve and efficient naDonal logisDcs system connected to the Global logisDcs network

AcFon: Strengthening of the NaFonal LogisFcs System to be connected to the Global LogisFcs network

• National Logistics Costs of the 2015 GDP declines by 3% from that of 2011 • Indonesian LPI Score is 3.1

• National Logistics Costs of the 2020 GDP declines by 4% from that of 2015 • Indonesian LPI Score is 3.3

• NaFonal LogisFcs Costs of the 2025 GDP declines by 5% from that of 2020 • Indonesian LPI Score is 3.5

Goal and Phasing

*SLoC: Sea Lane of Communication; ALKI: Indonesian Archipelagic Sea Lane)

Pusat Distribusi Provinsi

Pusat Distribusi Nasional

Legend:By sea / by rail By land / by rail / by seaBy sea / by rail / by land

Konektivitas:

Short Sea ShippingProvincial DistribuDon Center NaDonal DistribuDon Center

SEVERAL ACTION PLANS IN 2011-2015: §  International Hub Port, Distribution Center, and

National Freight Transportation

Implement Short Sea Shipping as the backbone of Domestic Freight Transportation

Develop International Hub Sea Port: Ø  Kuala Tanjung - in Western region; Ø  Bitung – in Eastern Region

Establish Distribution Center: Ø  Each province and Each Economy

Corridor will have at least one National Distribution Center.

Ø  Distribution Center will be designated as buffer stock.

Develop Cargo railway in Java, Sumatera, Sulawesi and Kalimantan

Develop international hub airports in Jakarta, Kuala Namu and Makassar

Set up the Standard Competency for Logistics Profession

Develop Multimodal systems through the integration of ship, train, truck, and aircraft

Coordination and Stakeholders commintment

Autonomy of Regions

Logistics Institution

Substitution of President

Thank you


...... Build up his soul, build up his body for the Great Indonesia........ (W.R. Supratman)


Q&A and Open Discussion

Lunch


LOGISTICS SYSTEM REFORM PROGRAM INDONESIA

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